Geely Holdings’ premium Volvo Cars unit booked a healthy rise in operating profit in the first half of 2017 despite ongoing heavy expenditure on new models such as the XC60 SUV.
First half operating earnings totalled SEK6.8bn (US$817m), up from SEK5.6bn a year ago, after Volvo increased market share in Europe and saw “a robust sales increase” in China.
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Sales rose from SEK84.2bn in H1 2016 to SEK99.1bn while operating profit margin improved to 6.8% from 6.6% despite big spending on new cars and technology.
Unit volume rose 8.2% to 277,641 cars.
“The first-half increase in sales means Volvo Cars remains firmly on course for a fourth consecutive record year,” the automaker said in a statement.
“We have reported strong profits at the same time as making ongoing investments in our transformation,” said president and chief executive Håkan Samuelsson. “Our momentum continues to build.”
During the first half, the company gained market share in the EMEA region, following healthy growth in several key markets. Sales were up by 6.6%.
In Asia Pacific, and China in particular, Volvo claimed to have outperformed the market. Sales increased 22.6% while China volume rose 27.6%.
In the US, the automaker expects to report “solid full year growth” after a strong second half. Supply restrictions affected first quarter sales but a return to growth during the second quarter (and the impending start of delivery of the revamped XC60) point to a stronger finish, Volvo said.
“Globally, we expect the pace of growth generated in the first half of the year to continue. We are confident we will report another record year in terms of sales,” added Samuelsson.
The automaker will launch the XC40, its first entry into the fast-growing small premium crossover segment, later this year, completing a full renewal and expansion of its SUV model line.
